Long-Term Strategies May Challenge Investors

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Long-Term Strategies May Challenge Investors
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Long-Term Strategies May Challenge Investors

Long-term strategies may challenge investors to stay focused. The fight against short-term thinking is getting harder as we accomplish so many things with increasing ease and speed.

There is more computing power in an iPhone than what NASA had during the first landing on the moon. Remember when Netflix mailed DVDs to your home? Now we can stream just about anything to our smartphones. And what would you have said ten years ago if I had told you the President of the United States’ main communication tool in 2018 would be Twitter?

But speed doesn’t change everything.

Long-Term Strategies in Business

Recently, Warren Buffett (CEO, Berkshire Hathaway) and Jamie Dimon (CEO, JP Morgan) wrote an op-ed calling for the end of quarterly earnings guidance. Neither CEO provides such short-term guidance for their firms. They stated, “In our experience, quarterly earnings guidance often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability.”

Back in 2016, we wrote about Larry Fink’s mission to get corporate executives thinking longer term. His letter to CEOs (supported by Buffett and Dimon) stated that “… one reason for investors’ short-term horizons is that companies have not sufficiently educated them about the ecosystems they are operating in, what their competitive threats are and how technology and other innovations are impacting their businesses.”

Long-Term Strategies in Wealth Management

And therein lies the connection with managing individual wealth. Investing one’s wealth (as opposed to “trading” or “speculating”) is all about long-term strategy, growth and sustainability. One of the biggest benefits a wealth manager can provide is education. In addition, a wealth manager can provide another big benefit–a process that’s focused on long-term results.

In conclusion, luck and chance play a large role in the short-term. But over the long-term, prices align with value.

Buffett, Dimon and long-term strategies

James Callahan, CFA

James Callahan, CFA is Managing Partner at Janiczek® Wealth Management.

Jim brings 20 years investment experience to Janiczek®’s disciplined Evidence Based Investing (EBI) and Strength Based Wealth Management™ (SBWM) platform. He has a Bachelor’s degree in Economics from Santa Clara University, an MBA from the University of Michigan, and is a CFA charterholder.

(303) 339-4483

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